Broadband access provider Verilink has filed for chapter 11 bankruptcy protection, announced the resignations of several top executives, and laid off 20 percent of its employees.

The Centennial, Colorado-based company called the voluntary petition it filed Monday “a necessary step in its strategy to reorganize its debt structure and relieve some of its financial pressures.”

Verilink hopes to retain control of its assets and plans to operate the business as a “debtor in possession” under the jurisdiction of the U.S. Bankruptcy Court for the Northern District of Alabama. The company said its main assets are its manufacturing facility in Madison, Alabama.

On Friday, Leigh S. Belden, the company’s president and chief executive resigned, along with CFO Timothy R. Anderson. Mr. Belden also resigned from the board, as did Steven C. Taylor.

To turn around the company, Verilink has hired the management services firm Grisanti, Galef & Goldress. Lee N. Katz, a managing partner at the firm, replaced Mr. Belden as president and chief executive at the company.

Verilink noted that Mr. Katz has over 30 years of experience in corporate restructuring, turnarounds, and workouts of firms operating under bankruptcy protection. Most recently, he restructured over $1 billion in debt at FirstPlus Financial Group.

Mr. Katz said the bankruptcy filing wouldn’t have an impact on Verilink’s day-to-day operations.

“While filing chapter 11 is never an easy decision, we believe it will provide Verilink with the flexibility needed to address Verilink’s financial challenges and valuable ‘breathing room’ to strengthen Verilink’s financial affairs,” he said in a statement.

Shares of Verilink rose $0.03 to $0.14 in recent trading on the Nasdaq. The company faces delisting from the Nasdaq because it has failed to meet continued listing requirements.

Verilink did not immediately respond to requests for comment.

Financial Challenges

The company has been battling financial difficulties and experienced a $37-million loss in fiscal 2005. In February, Verilink admitted its $23.5 million in liabilities exceeded its $18.1 million in assets by $5.4 million.

The company also had to change an agreement with its note holders last month for $5.3 million in senior convertible notes after the company did not have enough cash on hand to make a $2.6-million payment.

The company reduced its workforce by 17 percent last month after closing an office in Newark, California. Last July, it had 190 employees.

Mr. Belden and Mr. Anderson are expected to help Mr. Katz as consultants during the reorganization. They are also among the main creditors for the company. Verilink owes Mr. Belden $345,557 in severance, while Mr. Anderson is owed $106,448 in severance.

At the top of the creditor list is the Kennedy Company, an Englewood, Colorado-based firm whose claim amounts to $2.4 million in stock. The head of the company, James Kennedy, was the former chief executive of XEL Communications. Verilink acquired XEL in February 2004 for $17.7 million.

Other creditors include Flash Electronics, on the hook for $1.1 million, and Arrow Electronics for $490,439.